"If we can't go out, how can the Chinese auto industry talk about 'strong'?"
At the fourth meeting of the "China Automotive Internationalization Alliance" held in Jinan in early April, a representative of the participating automobile companies asked questions with excitement. However, the poor performance of China's auto exports in recent years is an indisputable fact. Although China has been the world's number one auto production and sales for seven consecutive years, according to statistics from the China Automobile Association, in 2015, China's auto exports were 730,000. Vehicles, down 20% year-on-year. This is the third consecutive year after China’s auto exports reached 1 million vehicles in 2012. Among them, passenger cars only exported 430,000 vehicles, down 20% year-on-year.
At the "China Automotive Internationalization Alliance" conference hosted by the China Association of Automobile Manufacturers in early April, China Dongfeng Motor Industry Import and Export Co., Ltd., FAW Group Overseas Business Management Department, Changan Automobile International Company, and Beijing Automotive International Development were gathered. Co., Ltd., Guangzhou Automobile Group Co., Ltd., Guangzhou Automobile Group Passenger Vehicle Co., Ltd., SAIC-GM-Wuling Automobile Co., Ltd., Huachen Automobile International Trading Co., China Heavy Duty Truck Group Co., Ltd., Shaanxi Heavy-duty Automobile Import and Export Co., Ltd., Great Wall Motor Co., Ltd., Geely Automobile International Co., Ltd., Anhui Jianghuai Automobile Co., Ltd., Xiamen Jinlong United Automobile Industry Co., Ltd., Beijing Futian International Trade Co., Ltd., Chongqing Lifan Industrial (Group) Import and Export Co., Ltd., Jiangling Motors Co., Ltd., Jianglingjin The heads of nearly 20 major Chinese automobile export enterprises, such as Export Co., Ltd. and Liaoning Shuguang Automobile Group. For Chinese auto companies, in recent years, in the process of “going outâ€, the international situation they face is generally not optimistic.
Corresponding to the continuous decline in exports, the trade frictions experienced by Chinese auto exports overseas are increasing, and the trade barriers of various countries are gradually increasing. With the global economic downturn, in order to promote the development of the domestic economy, governments have begun to encourage foreign investors to localize investment behavior, and give certain preferential measures, but there is a contradiction to the simple form of trade. "Now China's auto companies are still mainly in the form of trade in the process of going out, and are more vulnerable to tariff barriers. In fact, only through overseas investment can China's auto export model be transformed and upgraded." Secretary of China Association of Automobile Manufacturers Xu Haidong, a long assistant, also said that according to the forecast of the China Automobile Association, China’s total automobile exports this year will be about 640,000 units, which will still show a downward trend. The situation is not optimistic.
"The Iranian side proposed in March this year that it will probably charge import tariffs for auto companies in the form of pure trade, but if foreign auto companies set up KD factories in the local area, tariffs on imported products will be reduced." Wang Fang, the executive deputy general manager of Lifan Industrial (Group) Import and Export Co., Ltd., revealed the news on the spot. "Wuling has been doing international business for many years. For us, the road to overseas investment is already 'arrows on the strings, and I have to send it'." Cai Yazhen, senior director of overseas business of SAIC-GM-Wuling Automobile Co., Ltd., is even more outspoken. However, compared with the pure automobile trade, auto companies will face difficulties and challenges in many aspects such as capital, information, talents and brands in the process of overseas investment. How to promote the cooperation of Chinese auto companies in the process of internationalization, accelerate the pace of “going out†of Chinese auto companies, and enhance the international competitiveness of Chinese auto companies, which has become a common issue for the Chinese auto industry. In the "Opinions on the Development Plan of the 13th Five-Year Automobile Industry" recently released by the China Association of Automobile Manufacturers, it is clearly stated that the "internationalization" of China's automobile industry is "building a major automobile exporting country, and the international production capacity cooperation has made positive progress to realize the automobile." Overseas sales of products (including production) accounted for 10% of the total scale. If the forecast of China's automobile production and sales will reach 30 million units in 2025, the requirement of 10% of exports means the annual export volume of China's automobiles. Will reach 3 million vehicles. Will such a high export target become an impossible task? How will the Chinese auto industry achieve this goal? The reporters interviewed about the development of Chinese auto "internationalization". Xu Haidong, Assistant Secretary General of China Association of Automobile Manufacturers.
Reporter: In recent years, trade-oriented Chinese auto exports are facing real pressures such as tariffs and trade barriers. How should Chinese auto companies effectively implement internationalization strategies?
Xu Haidong: From the development history of the automobile industry in developed countries such as Europe, America, Japan and South Korea, they basically started to develop from the trade stage, and gradually deepened to the advanced stage of joint venture cooperation, investment and construction, and summarized their experience. We recommend Chinese brand auto companies adopt different strategies to implement international strategies in different national markets.
For countries that Chinese auto companies have entered, especially those with low entry standards for the automotive industry, we suggest that the overseas development model of Chinese brand auto companies should shift from a trade export model to a more focus on investment, technology, and The export mode of management is mainly from the export of single products and exports to the whole industry chain including equipment, technology, standards and brands. In terms of specific measures, it is necessary to accelerate the development of Chinese brand cars to the international market mainly through overseas direct investment, factory establishment, investment mergers and acquisitions, and overseas joint ventures. Chinese brand auto companies should take the group out to sea, establish and develop industrial parks in countries with strong market potential and strong industrial supporting capabilities, set up automobile production plants and assembly plants, and lead some parts and components production enterprises to settle in the park to achieve international development. To achieve true local production; Chinese brand auto companies must gradually establish local distribution networks and maintenance and repair centers, establish the image of Chinese auto brands, form the overseas development of the entire industry chain, and gradually build and enhance their core capabilities, and ultimately form overseas. Several large-scale automobile industry capacity cooperation demonstration bases.
In the automobile market of developed countries such as Europe, America, Japan and South Korea, the future will be a strategic market that Chinese brand cars must enter. However, due to product quality, comprehensive competitiveness and regulations, China's branded automobile products have not entered these developed markets on a large scale. In view of the importance of the developed markets, Chinese brand auto companies should pay attention to the planning of the auto market in developed countries in the next decade, and comprehensively enhance the competitiveness of Chinese brand cars.
How to enter the developed markets of Europe, America, Japan and South Korea, we suggest the following strategies: to formulate medium- and long-term strategic goals for overseas development (10-20 years) for developed country markets, and to rationally formulate specific plans and steps, and adopt appropriate exports. Mode; in terms of entry strategy, it is recommended to adopt a trade model first, gradually establish its own maintenance and service system, form a basic customer group, gradually establish its own brand, and then transition to the stage of direct investment and construction; enterprises can also take European and American developed countries set up a model of automotive technology and engineering R&D centers, cooperated with foreign companies with strong technical strength, improved the R&D and manufacturing technology level of Chinese brand cars, and prepared technically for entering developed countries. In the market competition strategy, it is recommended. Select the weak links in the target country's market competition, enter with mature products, gradually occupy the market, establish word of mouth and brand, and then transfer to high-end products and markets.
Reporter: At present, China's auto industry has many problems in exporting destinations, but the number is small. What do you think of this?
Xu Haidong: We suggest that during the period of 2016-2025, the development of China's auto industry will focus on developing countries and take into account the developed markets. In terms of the choice of developing countries, based on the national “One Belt and One Road†strategy and international capacity cooperation policy, combined with the actual development of China's automobile industry, based on comprehensive considerations, we initially determine the internationalization of China's automobile industry. The key countries for development are: Iran, Egypt, Russia, India (right rudder), Indonesia (right rudder), Vietnam, Saudi Arabia, United Arab Emirates, Thailand (right rudder), Malaysia (right rudder), Iraq, Brazil, South Africa (right Helm), Kazakhstan, Pakistan and other countries.
Reporter: According to statistics, in 2015, China's passenger car exports were 427,700, while the joint venture auto company's export volume was only 73,917, accounting for 17.28% of passenger car exports, which is a huge difference from its domestic market share. If the export volume of the joint venture cannot be improved, it is not easy to complete the goal of 10% of China's auto exports in 2025, only relying on Chinese auto brands.
Xu Haidong: Previously, when foreign-invested auto companies entered into joint ventures with China, the strategic and strategic positioning of the joint ventures was mainly aimed at China's domestic sales, rather than using China as a production base for entrepot trade. Direct investment in the target country and strive for a larger market share is an important reason for the localization strategy of foreign auto companies.
In the future, the international development of joint venture auto companies, we believe that there are advantages in the following aspects: First, the scale advantages of the joint ventures in the Chinese market, supply chain advantages, etc. can support joint ventures to develop export-oriented business. Second, the intensification of market competition will force foreign-invested companies to consider exporting to markets outside China. As the sales growth rate of the Chinese auto market declines, the joint venture automakers will also face the pressure of fully utilizing the production capacity, and can use the advantages of Chinese manufacturing to export to the global auto market. In addition, the preferential policies of China and neighboring countries will also attract Chinese joint ventures to export superior products to neighboring countries.
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